This page has been archived and commenting is disabled.
Moody Now Downgrades 9 Greek Banks, World Yawns
Moody's downgrades nine Greek banks
Debt and deposit ratings remain on review for further possible downgrade
Limassol, April 30, 2010 -- Moody's Investors Service has today downgraded the bank financial strength ratings (BFSRs) as well as the deposit and debt ratings of nine Greek banks to reflect their weakening stand-alone financial strength and the anticipated additional pressures stemming from the country's challenged economic prospects. The banks' deposit and debt ratings remain on review for possible downgrade and will be concluded at the same time as Moody's ongoing review of the country's sovereign rating, which serves as a reference point with which to impute bank rating uplift as a result of possible systemic support.
The banks affected by today's rating action are: National Bank of Greece, EFG Eurobank Ergasias SA, Alpha Bank AE, Piraeus Bank, Emporiki Bank of Greece, Agricultural Bank of Greece, General Bank of Greece, Marfin Egnatia Bank and Attica Bank. A detailed list of today's rating actions is provided at the end of this release.
Moody's says that the acute economic strain facing Greece is materially impacting the banking sector's financial condition, requiring it to be further supported. "Increasingly challenging economic prospects point to low business growth, increased loan quality problems and continued pressure on margins. Based on the events of the past few weeks, Moody's expects the Greek banking system to face heightened challenges, thus necessitating a fundamental repositioning of the banks' ratings", says Mardig Haladjian, Senior Vice President.
Although additional measures taken to address fiscal imbalances at the national level are positive for the sovereign's creditworthiness, they may come at a cost of depressing economic growth over the short to medium term. Negative growth will in turn give rise to unemployment, lower consumer disposable income and reduced profitability in the small- and medium-sized enterprise (SME) and corporate sectors. Mr. Haladjian added that "Moody's expects the upward trend in non-performing loans, which began in 2008, to continue in 2010 and 2011. Taken together, these factors will place significant additional pressure on the banking sector's already weakened asset quality and profitability."
The banks' funding franchises have also weakened over the past few months. The erosion of market confidence caused by the country's fiscal problems has curtailed the banks' access to the interbank and bond markets. As a result, the banks have had to rely increasingly on the ECB to manage their liquidity needs -- indeed, ECB funding now accounts for approximately 15% of Greek commercial banks' total liabilities. Moody's expects that, over the foreseeable future, Greek banks are likely to face very difficult conditions in the wholesale markets and will therefore continue to rely on ECB funding. In this regard, Moody's takes comfort that the ECB will remain a reliable source of funding for the banks until market confidence can be restored. However, access to ECB funding is not unlimited and Moody's will continue to closely monitor each bank's funding needs and the assets available to post as collateral for ECB funding.
The banks' BFSRs carry a negative outlook to capture the possibility of further deterioration in the country's economic conditions, which would necessitate additional liquidity and solvency support.
The specific rating changes implemented today are as follows:
National Bank of Greece SA, NBG Finance plc, and National Bank of Greece Funding Limited:
- Bank financial strength rating downgraded to D+ from C- (mapping into a baseline credit assessment (BCA) of Ba1); rating remains on negative outlook
- Deposit ratings downgraded to Baa2/Prime-2 from A3/Prime-2; ratings remain on review for downgrade
- Senior unsecured debt rating downgraded to Baa2 from A3; rating remains on review for downgrade
- Subordinated debt ratings downgraded to Baa3 from Baa1; rating remains on review for downgrade
- Backed (government-guaranteed) senior unsecured MTN remains unchanged at A3 on review for downgrade
- Preferred Stock (Hybrid Tier 1) downgraded to B1 from Ba1; rating remains on negative outlook
EFG Eurobank Ergasias SA, EFG Hellas plc, EFG Hellas (Cayman Islands) Limited, and EFG Hellas Funding Limited:
- Bank financial strength rating downgraded to D from C- (mapping into a BCA of Ba2); rating remains on negative outlook
- Deposit ratings and senior unsecured debt ratings downgraded to Baa3/Prime-3 from A3/Prime-2; ratings remain on review for downgrade
- Commercial paper downgraded to Prime-3 from Prime-2; rating remains on review for downgrade
- Subordinated debt ratings downgraded to Ba1 from Baa1; rating remains on review for downgrade
- Backed (government-guaranteed) senior unsecured MTN unchanged at A3 on review for downgrade
- Preferred Stock (Hybrid Tier 1) downgraded to B2 from Ba2; rating remains on negative outlook
Alpha Bank AE, Alpha Credit Group plc, Alpha Group Jersey Limited:
- Bank financial strength rating downgraded to D from C- (mapping into a BCA of Ba2); rating remains on negative outlook
- Deposit and senior unsecured debt ratings downgraded to Baa3/Prime-3 from A3/Prime-2; ratings remain on review for downgrade
- Commercial Paper downgraded to Prime-3 from Prime-2; rating remains on review for downgrade
- Backed (government-guaranteed) senior unsecured unchanged at A3 on review for downgrade
- Subordinated debt ratings downgraded to Ba1 from Baa1; rating remains on review for downgrade
- Preferred Stock (Hybrid Tier 1) downgraded to B2 from Ba2; rating remains on negative outlook
Piraeus Bank SA, Piraeus Group Finance plc, and Piraeus Group Capital Limited:
- Bank financial strength rating downgraded to E+ from D+ (mapping into a BCA of B1); rating remains on negative outlook
- Deposit and senior unsecured debt ratings downgraded to Ba1/Not Prime from Baa1/Prime-2; long-term rating remains on review for downgrade
- Backed (government-guaranteed) senior unsecured unchanged at A3 on review for downgrade
- Subordinated debt ratings downgraded to Ba2 from Baa2; rating remains on review for downgrade
- Commercial Paper downgraded to Not-prime from Prime-2
- Preferred Stock (Hybrid Tier 1) downgraded to Caa1 from Ba3; rating remains on negative outlook
Agricultural Bank of Greece SA, ABG Finance International plc:
- Bank financial strength ratings downgraded to E+ from D (mapping into a BCA of B2); rating remains on negative outlook
- Deposit and senior unsecured debt ratings downgraded to Baa3/Prime-3 from Baa1/Prime-2; ratings remain on review for downgrade
- Subordinated debt ratings downgraded to Ba1 from Baa2; rating remains on review for downgrade
Emporiki Bank of Greece SA, Emporiki Group Finance plc:
- Bank financial strength ratings downgraded to E+ from D (mapping into a BCA of B1); rating remains on negative outlook
- Deposit and senior unsecured debt ratings downgraded to Baa2/Prime-2 from A3/Prime-2; ratings remain on review for downgrade
The ratings of Emporiki Bank impute support from its French parent bank, Credit Agricole SA.
- Subordinated debt rating downgraded to Baa3 from Baa1; rating remains on review for downgrade
Marfin Egnatia Bank SA, Egnatia Finance plc:
- Bank financial strength ratings downgraded to E+ from D (mapping into a BCA of B1); ratings remain on negative outlook
- Deposit and senior unsecured debt ratings downgraded to Baa2/Prime-2 from Baa1/Prime-2; outlook changed to developing
On the down side, the rating could be lowered if the bank's BCA were to be downgraded due to further weakening of the Greek franchise, while on the upside the rating could converge with that of its higher-rated Cyprus-based parent bank, once the merger is concluded.
- Subordinated debt ratings downgraded to Baa2 from Baa1, with developing outlook
Bank of Attica SA, Attica Funds plc:
- Bank financial strength ratings downgraded to E+ from D (mapping into a BCA of B1); outlook changed to negative
- Deposit and senior unsecured debt ratings downgraded to Ba2 from Ba1; rating remains on review for downgrade
- Subordinated debt rating downgraded to Ba3 from Ba2; rating remains on review for downgrade
General Bank of Greece SA:
- Bank financial strength ratings downgraded to E+ from D (mapping into a BCA of B1); rating remains on negative outlook
- Deposit ratings downgraded to Baa2/Prime-2 from Baa1/ Prime-2; ratings remain on review for downgrade
The ratings of General Bank impute support from its French parent bank, Societe Generale.
The previous rating actions on National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, Piraeus Bank, Agricultural Bank of Greece and Emporiki Bank of Greece, were implemented on 23 April 2010, when ratings were placed on review for possible downgrade. The last rating action on Marfin Egnatia Bank SA was on 23 September 2009 when the BFSR was downgraded to D from D+. The last rating action on Bank of Attica SA was implemented on 24 April 2007 when Moody's assigned global local currency deposit ratings. The last rating action on General Bank of Greece SA was implemented on 15 December 2009 when Moody's downgraded the bank's BFSR to D.
The principal methodologies used in rating these issuers are Moody's "Bank Financial Strength Ratings: Global Methodology", published in February 2007, and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", published in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt", published in November 2009, which are available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating these issuers can also be found in the Rating Methodologies sub-directory on Moody's website.
All of the nine rated banks affected by today' rating actions are headquartered in Athens, Greece.
National Bank of Greece SA reported total assets of EUR113.4 billion at the end of December 2009.
EFG Eurobank Ergasias reported total assets of EUR84.3 billion at the end of December 2009.
Alpha Bank SA reported total assets of EUR69.6 billion at the end of December 2009.
Piraeus Bank SA reported total assets of EUR54.3 billion at the end of December 2009.
Agricultural Bank of Greece SA reported total assets of EUR32.8 billion at the end of December 2009.
Emporiki Bank of Greece SA reported total assets of EUR28.4 billion at the end of December 2009.
Marfin Egnatia Bank SA reported total assets of EUR23.2 billion at the end of December 2009.
Bank of Attica SA reported total assets of EUR5.6 billion at the end of December 2009.
General Bank of Greece SA reported total assets of EUR4.8 billion at the end of December 2009.
»
- 4350 reads
- Printer-friendly version
- Send to friend
- advertisements -
As the credit system continues to slowly collapse you can expect up cycles within the large down cycles. Why does everyone get mad out here? Life would be boring if everything just moved in a straight line. Sit back and enjoy the entertainment.
They say they are going to use the bazooka, well, I think they better have it ready to go pretty soon on Greece, and they better start preparing for Portugal and Spain as well.
The big question in my mind is that since a bazooka is identical at both breech and muzzle, how do they know which way to point it?
Well, they have two choices.... 1.) certain instant death without the bazooka 2.) chance they have it pointed in the right direction and hope what has been inevitable for nearly 65 years will be delayed a little longer
The more successful the system is, larger the upwave and longer the duration before collapse ie the longer you are able to delay. The collapse has been know since 1944, the exact date and knowing how high the wave would be before the collapse was not known. Usually 60-80 years, or a generation... Math completely unsustainable after that.
"That is the sound of inevitability... It is the sound of your death"
Eventually, they will have to use the bazooka like a machine gun, then the bazooka would have to shoot laser beams at the speed of light, the power would have to exponentially grow as well.
2012: Global Thermal Nuclear War
2016: Scattered Civilization Crawls Out of Its Bunkers
2020: Patchy Areas of Low Radiation Reclaimed for Farming
2100: First World Wide Broadcast Network Stands Up
2100.1: Moody's Head-line: Concerning 2012: Did someone fart?
+10!
Your prophecies are so far off the mark that if you were playing darts in a smoky pub your throw would end up in the back of the head of the tattooed tradesman holding a beer leaning against the bar. False prophets give real prophets a bad name.
180 !
I, sir, do not cheapen my art by calling it prophecy. My work is strictly as a comodian.
I get your drift. Let's agree that "Global Thermonuclear War" is black humour and call it quits.
I thought you were right on with the fart. It sums it up beautifully.
What we need to do here is first build a gigantic rug.
Next, in the middle of the night when the world is asleep, we need to quietly sweep Greece under it.
Solved. Shhhhh.
Shhh...(that's what just happened)...lol...
Now we have another "monster under the bed" or "thing under the carpet."
Eventually you are going to need a rug to cover all the countries.
at that point it becomes a sedimentary layer and we become our own archeologists.
I can dig that.
The Hellenist Association of Athens will appreciate your comment. I think you should hop on a plane and pay a visit. Take some flyers with you. A valid life insurance contract would come in handy as well.
Hard to hear said tree fall in said woods when the world media has their fingers jammed in their collective ears and is yelling "LA!! LA!! LA!! I CAN'T HEAR YOU!!!!!" at the top of their lungs.
The head-in-the-sand optimism appears to not be noticing that Goldie is down to 151 this morning. I say XLF closes up 2%?
What could happen?
Signed,
Dick Fuld
Don't forget folks. Tonight is Bank Failure Friday. How many will it be tonight and, in a brand new category, how many will be clustered in one state. The record was set last week with all 7 in the state of Obama. I set the over/under at 8 total and 4 in any one state.
http://fdic.gov/
5/2. They'll take a breather.
We should run a blog pool with the winner getting a ZH tee shirt. Second place gets to turn the lights off at Goldman Sachs.
The barn door is now safely closed.
I said last evening, the markets simply don't care about this now. They've heard about it for days on end and see it as "not our problem". Whether right or wrong, the march onward continues for US equities.
(I know I've posted this before, but just a few more times for anyone who might have missed it yesterday:)
Before responding to "Harry Wanger", please be aware of just whom and what you are dealing with in this person:
http://www.minyanville.com/businessmarkets/articles/AAPL-apple-gm-psycho...
His real name is James Kostohryz, and he is here posing as a troll in dishonesty and in disregard for the fundamental purposes of this forum. He is NOT posting here in good faith, but is purposely antagonizing those with independent, anti-establishment views and opinions for his own selfish and cynical purposes, as part of a self-styled study on "the psychology of permabears".
He believes that anyone who opposes the current widespread fraud, corruption and rampant lies within our societies and governments are "utopian" and unrealistic, pollyannish dreamers.
And for those ZeroHedgers who are advocates of sound money backed by gold, this bankster shill is already out there with one of the most disingenuous, dishonest pieces of pro-establishment propaganda on the topic, expounding on how such financial integrity is "impossible", and merely "the rants of an ideological fringe":
http://finance.yahoo.com/news/The-Gold-Standard-Solid-as-minyanville-285...
Please do NOT respond to this reprehensible troll, here or anywhere else on ZeroHedge. He is NOT here in good faith, and should be shunned! Responding to him only plays into his cynical hands and feeds his twisted game.
Everyone who wants to is hearing the tree limbs snap. ZH part of the reason.
FILL IN THE BERNANKE BILLS:
http://williambanzai7.blogspot.com/2010/04/fill-in-bernanke-bill-specime...
Very nice. Does each bill come with an indelible marker to fill in the numbers or can they be changed on the fly. Most certainly this picture deserves a posting.
They should have a giant blood sucking squid on the back of this bill.
And lasers.
omfg! Is that what they give to ex-US users of our toilet roll currency, a "Just how much do YOU want from the US citizens? Just fill it in. Over 10 figures is normal. Totally Jr. to everything, forever, even your next yacht payment."
Gee I went to the bank to get some operating cash and come home to see this.
I predict Ebay auctions after all hell breaks loose where the seller is Mr. Wolf and the thing being auctioned in a group contribute style is **very** harsh treatment of certain people.
+10!
Wouldn't your Schrodinger paradox be more along the lines of: banks by logic of your average cretin are in the state of solvency and insolvency, where by Schrodinger's conjecture shows they clearly cannot?
"World Yawns" LMAO +1000 Thanks TD needed the laugh this am.
Comparing the Greek economy to America's is like trying to find significance in the relationship between a tadpole and a whale. The Greeks will receive their bail-out cash but if austerity measures are not introduced and they do not choose to live within their means then default will follow. They are playing a good game. They will take the money, strengthen their defences and do everything to try and defeat who they perceive as the enemy. The global economy does not need Greece to function however. If other smaller Euro states go down the same path we will still be left with the powerhouse that is the USA. The major European nations like Germany, France, Switzerland, The Netherlands, Norway, the UK et.al. can prosper with certain measures introduced. Citizens of the strong European nations will not tolerate continued subsidising of certain populations if they are not pulling their weight.
The answer is YEAH because the debt holders are ever present observers. Unless the party screws the information content to a such a degree that debt holders lose perspective of the real value of their holdings. (A rule that forces the valuation of all debt at par unless the gov says otherwise & restructure event is in process. )
Schroedinger indeed. The cat is both bankrupt and non-bankrupt, and any collapse to one of these two ground states has been duly prevented.
Come to think of it, there is also an Einstein-Podolsky-Rosen aspect. How can there be interaction between things so distant as Greece and the US pocketbook?
Oh wait---
Are the German banks solvent?
If you work for Moody's your an idiot!
Money McBags likened the Moody's dowgrades "to downgrading hydrogen as a fuel for zeppelins after the Hindenburg crash or Heidi Montag's singing career after her second album was released."
http://whengeniusprevailed.blogspot.com/
Wait 'til they start downgrading the French & German Banks.